Rolta Q1 net up on intellectual property investments

Rolta Q1 net up on intellectual property investments

Mumbai: Rolta India Ltd on Monday posted a 33% rise in September-quarter profit, surpassing analysts’ expectations, helped by investments in intellectual property and a sharp rise in revenue from enterprise IT solutions.

The company, which follows a July-June fiscal, posted a net profit of Rs747.7 million on a consolidated basis, compared with Rs561.2 million a year ago.

Revenue jumped 22% to Rs4.28 billion.

A Reuters poll of brokerages had forecast Rolta to post a net profit of Rs655.7 million on revenue of Rs4.23 billion.

On a standalone basis, the company, which offers GIS, engineering services and enterprise software, posted net profit of Rs966.2 million on revenue of Rs3.29 billion.

“The company’s non-linear growth with some of the intellectual property products that they hold was ahead of expectations," Prabhudas Lilladher analyst Shashi Bhusan said.

The Mumbai firm, which used to rely on third-party software providers, has for the past 2-3 years been developing more of its own software. It thus saves on licensing fees and also benefits by letting out its products.

“This approach is beginning to bear fruit, with the company now offering differentiated solutions that not only command higher value, but also establish a growing base for annuity revenues and improved margins," chairman and managing director KK Singh said in a statement.

Prabhudas’ Bhusan said he was also positively surprised at the sharp rebound in the enterprise IT solutions segment, with revenue more than doubling to Rs300.8 million on a standalone basis.

In a separate statement, Rolta said its board has approved raising up to $150 million through allotment of shares, convertible bonds or financial instruments such as global depository receipts, American depository receipts and foreign currency convertible bonds.

At 2.15 pm, shares of Rolta, which have lost almost 12% of their value in the past one year, were trading up 1.88% at Rs167.85 in a firm Mumbai market.